The Future of Business Analytics; from Transactional to Interactional

I’d like to start this blog post by quoting Geoffrey Moore from his paper A sea of change in Enterprise IT, “Systems of Record are no longer a source of competitive differentiation, but a necessary condition of doing business. The next stage enterprise IT will be enabled by Systems of Engagement that overlay and complement our deep investments in Systems of Record”. While Moore was referring to the business impact of third generation communications complemented by new collaboration capabilities, I believe his sentiment applies directly to the future of analytics.

In the past companies have spent huge time, effort, and investment in optimizing their business around transactions (systems of record), with relational databases and BI & Reporting tools being the big winners. In the future we are going to see the focus shifting to the optimization of the business around people and their interactions (systems of engagement); customers, partners, or employees. The future of business analytics will be all about overlaying systems of engagement on top of the systems of record to generate a more complete, holistic, and real-time actionable view of the business.

Today’s business analytics is all about analyzing transactions so we can quantify what’s happened; taking sales as an example, analytics can tell you the average close rate, time to close, deal size, across product, industry, territory, or sales rep, and how these numbers are trending.

Tomorrow’s business analytics will be about analyzing interactions so we can truly understand how & why something happened; it will know how deals are being closed, who’s involved, what they are doing, how they are interacting, what content & data they are using, and will be able to recognize the interactions that characterize successful deals — the people, skills, relationships, activities, content, data, strategies, etc. This will inform real-time business decisions, allow us to structure the business around successful work practices, combine the right mix of skills to maximize optimal business outcomes, and recognize the valuable data, knowledge, and networks as they directly relate to business results.

However this type of analytics-optimized business can only be realized by the socially-enabled enterprise that can generate and capture interactional data and integrate it into their business analytics. To finish up with another quote from Moore “You have to grab onto the new communication and collaboration systems or you will simply end up as roadkill”.

So this is the future of business analytics, and its all about interactions! :-)

12 Responses to “The Future of Business Analytics; from Transactional to Interactional”

Great post Marie. I think you are indicating this but I would extend this to not just interactional but about relationships and community. Interactional can still be transactional – just between two people. Interactions are part of what leads to relationships and relationships lead to community. That’s where things get interesting to me. I love your train of thought. I look forward to catching up.

When I think interactional I definitely think about it in the abstract sense, so Marie could interact with an application (book a flight), with a person (send an email), with a company (attend a meeting), with a document (like or comment), with a community (join, like, leave), … etc.

And these interactions could come from any system which includes a transactional one; such as the flight booking system which informs the system that Marie will be in London in 2 weeks. Or the CRM system that informs the system that Marie attended an Acme Corp meeting, etc.

So yes, interactions do in fact describe relationships both in terms of their frequency (daily vs monthly), channel (microblog vs. email), language (formal vs. informal, positive vs. negative), … and so on

Very good post Mary (and sorry for being late in the conversation…). I fully agree with your point but there’s another side of the question that deserves a lot of attention (at least IMO).

There are clear evidences that systems of records do not provide us with the data we need to make informed decisions and that we’ll find the missing data into systems of engagement. But actual value won’t come from these data alone as it didn’t from structured data : it will come from the ability to identify patterns involving both and understand the impact of a given social trend on hard data.

I think it’s more a matter of records + engagement than records or engagement.

Bertrand, I couldn’t agree more. You’ve hit the proverbial nail on the head. Each of these classes of data give us a subset of the picture, and IF (and that’s a big IF) we can successfully blend them (addressing all the wonderful challenges of context & disambiguation) then we get the complete picture (from a data perspective). Now what we actually do with that data is another wonderful challenge, but I see this as somewhat separate from our ability to effectively bring these two classes of data together. Combining the “data blending” & analytics challenges is what I call “Project Breadcrumb” as it tries to bring all the disparate digital breadcrumbs together in order to get a clear picture of what the heck is really going on across the enterprise. It’s when the magic happens :-)

Over the last few months I’ve seen an increasing number of requests from folks who want to better understand what is going on across their enterprise social and collaboration networks with a view to “being smarter”; both at an individual and organizational level. Therefore, I thought it might be time to reprise this blog post from early 2013.

And I know, I’m a complete disaster for being overly optimistic on the readiness of the market to adopt a new innovation. The good news though, my predictions generally do come true, it just takes a bit longer than I anticipate. For example; In 2006 we built, and demoed at Lotusphere, our first IBM social recommender system, as part of the European FP6 research project Nepomuk, which we lovingly called “SmartAss” short for “Smart Assistant”, with the tagline “Why should your boss be the only one with an assistant” :-) And now there are recommender systems all over the place, and really smart Smart Assistants like IBM Watson changing how knowledge workers work.